Abstract

This current study examines how MNE subsidiaries constitute “knowing” in their ongoing practices in local context, with a focus on the Chinese cultural context in which the subsidiary is embedded. From a dynamic system perspective, it provides a framework to further discuss learning of organizations with particular relevance to the Asian business context. This study complements the current understanding of learning by highlighting the essential role of context in enacting knowledge in practice. We conducted 48 in‑depth interviews with managers in MNE subsidiaries located at three cities in China, including: Beijing, Shanghai and Guangzhou, which captured a broad picture of the Chinese geographic variations and the cultural context. It has practical implications for managers working in China and Asian emerging markets. This study explains the dynamic process of learning in MNE subsidiaries, and the interactions between employees and the local cultural context. Firstly, it reveals the learning nature of daily practices in subsidiaries from a practice view, which further confirms that the “knowing” process of organizations is a continuous, circular process of change characterized as systems dynamics. Second, it discusses that knowing and meaning are embedded in specific contexts of subsidiaries, which are across boundaries and faced with navigating a local cultural context. It highlights the effects of cultural context in enacting knowledge in practice by discussing contextual dynamics of knowing practices in MNE subsidiaries. In particular, the Chinese local context of learning has been examined with support of empirical data. Third, it finds that expatriates serve as channels and storehouse of tacit knowledge in subsidiaries considering the characteristics of Chinese cultural context. It suggests managers working in subsidiaries take advantages of local cultural context. It also has practical implications for MNE headquarters to expand into Asian emerging markets.